Depreciation Method Of Production Unit

The total of depreciation using the unit of measurement method of production is calculated based on each unit of measurement of production.

Formula of Depreciation Method of Production Unit

Information :
A = Cost of assets is the total of costs incurred yesteryear the companionship to cause down an activation until the property is ready to live on operated.
S = Estimated relaxation value of the property is the value of the appraisal that may live on obtained through the assets that accept passed its life.
SK = Book value at the destination of twelvemonth K
r = Depreciation charge per unit of measurement or per centum depreciation
Q = Number of units
D = Depreciation expense for each period

Example Question of Depreciation Method of Production Unit

An property at a toll of $ 25,000,000. It is estimated that the useful life of the assets for half dozen years alongside the production total of 10,000 units in addition to has a relaxation value of $ 5,000,000. If the disclose of production each twelvemonth is 2,500 units, 2,250 units, 2,000 units, 1,750 units, 1,000 units in addition to 500 units, respectively. Please specify the depreciation charge per unit of measurement of each unit of measurement of production unit!

Answer:
A = $ 25,000,000
n = half dozen years
Q = 2,500 + 2,250 + 2,000 + 1,750 + 1,000 + 5000 = 10,000 units

So the depreciation charge per unit of measurement of each unit of measurement of production unit of measurement is $2,000 per unit.

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Referensi :

• To'Ali's majority math grouping accounting in addition to sales